Tracsis : Annual Report and Accounts 2020

Annual Report & Accounts 2020

TRACSIS PLC | 1

Contents

Strategic Report

Our Business at a Glance	2
Strategy and Business Model	3
Chairman and Chief Executive Officer's Report	4
(incorporating Business Review and Future Developments)
Risk Management	9
Covid-19 review	14
Key Performance Indicators	15
Section 172 Statement	16

Governance

Board of Directors	18
Directors' Report	19
Directors' Remuneration Report	22
Corporate Governance	26
Statement of Directors' Responsibilities	28
Independent Auditor's Report to the members of Tracsis plc	29

Financial Statements

Consolidated Statement of Comprehensive Income	37
Consolidated Balance Sheet	38
Consolidated Statement of Changes in Equity	39
Consolidated Cash Flow Statement	40
Notes to the Consolidated Financial Statements	41
Company Balance Sheet	88
Company Statement of Changes in Equity	89
Notes to the Company Balance Sheet	90
Group Information	100

2 | Annual Report and Accounts 2020

Strategic Report

Our Business at a Glance

Tracsis plc was founded in January 2004 to commercialise world class research and expertise developed in the field of transport scheduling and software optimisation technologies.

In the subsequent years Tracsis has grown rapidly, diversified into related transport technologies, and successfully executed a strategy that has seen it make a total of fourteen acquisitions and three investments. Today, the Group specialises in the provision of software and a wide range of services for the rail, traffic data and wider transport industries.

Tracsis' products and services are used to increase efficiency, reduce cost and improve the operational performance and decision making capabilities for its customers. The Group has a blue chip client base which includes the majority of UK transport operators and the business also works extensively with large transport authorities and infrastructure operators such as Network Rail, the Department for Transport, a wide range of government agencies & local authorities, a variety of large engineering and infrastructure companies, plus event organisers.

The Group's products and services comprise two principal offerings:

• Rail Technology & Services

• • Software: Industry strength optimisation, rail management, planning, timetabling safety & risk management software, smart ticketing and delay-repay software that cover a variety of asset and information classes, plus related hosting services;
  • Remote Condition Monitoring (RCM): Technology and reporting for critical infrastructure assets in real time, to identify problems and aid with preventative maintenance;
  • Professional Services: Consulting and technology related professional services across the operational and strategic planning horizon for traffic and transport customers and network operators
• Traffic & Data Services:
• • Collection, collation and analytical services of traffic and passenger/customer data within rail, traffic and pedestrian rich environments;
  • Event planning, traffic management and parking for outdoor and sporting event markets;
  • Systems development and data analytics that combine geographical information systems (GIS), location technologies, data analytics and field computing from transportation, asset management, planning, and environmental customers

Tracsis has multiple offices in the UK and Ireland which service our growing client base.

The business drives growth both organically and via strategic acquisition and has made fourteen acquisitions since coming to market in 2007.

Financial highlights

for the year ended 31 July 2020:

• Revenue: £48.0m (2019: £49.2m)
• Statutory Profit before Tax: £4.1m (2019: £6.6m)
• Adjusted EBITDA*: £10.5m (2019: £10.5m)
• Cash balances: £17.9m (2019: £24.1m)

*Reconciliation provided in note 31.

TRACSIS PLC | 3

Strategic Report

Strategy and Business Model

Our vision for Tracsis is to become a leading provider of high value, niche technology solutions and services for the global traffic and transportations markets. Our business model remains focussed on specialist offerings that have high barriers to entry, are sold on a recurring basis under contract, and to a retained customer base that is largely blue chip in nature. Our vision is being achieved via the delivery of a three pronged strategy.

1. Manageable, industry-led organic growth through continual innovation of products and services and an excellent close working relationship with our customers.
2. International expansion into select overseas markets that share problems with the industries we currently serve.
3. Reinvesting Group profits to fund further accretive acquisitions that meet with our disciplined investment criteria.

We believe our strategy will allow Tracsis to continue the growth trajectory we have achieved since IPO in 2007 and deliver further significant value to shareholders in the short, medium and long term. Achievements made in the past year in respect of our business strategy can be summarised as follows:

	Strand of Strategy:	Developments 2019/20:
1	Organic	 Further significant contract awarded for the provision of TRACS Enterprise
	further sales from existing	software product with another major UK rail operator, which includes the
	products to UK	renewal of some existing systems already licenced by the customer, plus
		significant levels of additional functionality through the TRACS Enterprise
		suite, including ATTUne

 Continued strong trading at our Infrastructure businesses - Remote Condition Monitoring and Ontrac, including securing a major order for the provision of remote condition monitoring technology, plus associated Centrix software and related support services

 High levels of software renewals and recurring revenue

 Traffic & Data Services Division impacted by Covid-19 due to the cancellation and postponement of significant amounts of Event work and also Traffic Surveys, which had an impact on organic revenue and profitability

• Overseas Markets
  show promise and remain relatively untapped

• Acquisitions

• Full year contribution from Compass Informatics Limited acquisition which was acquired in January 2019, and increases the Group's presence in Ireland
• Existing overseas sales in Ireland, Sweden and New Zealand all continued
• Completed the acquisition of iBlocks Limited, a software company that specialises in the provision of smart ticketing solutions, automated delay repay and the development of mission critical back office systems that are used by the rail industry
• Further potential targets evaluated during the year